A weak performance in the Xbox and Playstation markets has led to a 27 per cent drop in half-year profits for video game retailer Game Digital.
Pre-tax profits for the 26 week period ending January 28 declined to £16.5 million from £22.5 million a year earlier.
Meanwhile, revenues went down from £549.2 million to £499 million, a nine per cent drop thanks to a weak UK market.
However, Game‘s Spanish market – which makes up a third of revenues – recorded a 20 per cent increase in revenues.
In addition, the retailer‘s events, esports and digital division increased its revenues by 121 per cent.
Despite this, Game‘s losses widened from £2.4 million in the first half of last year to £5.6 million in the latest trading update.
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The retailer said its new in-store gaming areas, which have been set up in seven of its stores as part of a strategy to diversify revenues away from games and hardware, were yielding “encouraging early results”.
The company plans to open another 20 in 2017, and Game chief executive Martyn Gibbs is hoping the demand for the Nintendo Switch and the upcoming launch of the Xbox Project Scorpio would lead to “a stronger slate of new titles later in the year”.
“We continue to prioritise our efforts on taking the necessary actions to respond to these challenges, whilst positioning the business to capitalise on major future market opportunities,” Gibbs said.
“Although we expect industry-wide challenges in our core Xbox and PlayStation categories to continue, we anticipate the overall UK market to remain positive during the rest of 2017.”
Game‘s shares jumped over five per cent this morning despite the lacklustre half-year performance.